As global inflation shows signs of easing from recent multi-decade highs, many central banks are beginning to lower borrowing costs. The FT global inflation and interest rates tracker provides updated information on consumer price inflation and central bank policy rates across various countries, alongside historical figures and influential factors impacting policymakers’ decisions on interest rates.
The inflation surge, sparked by post-pandemic supply chain disruptions and escalating energy prices following Russia’s invasion of Ukraine, affected economies worldwide. As inflation rates in advanced economies stabilize, central banks emphasize that reaching their target inflation rate of approximately 2% remains challenging.
Recent trends in monetary policy reveal a shift; many central banks, which previously reduced rates during the pandemic to stimulate economic activity, are now easing those rates as inflation begins to decline. In many G7 nations, core inflation, which excludes volatile items like food and energy, continues to be elevated, suggesting persistent underlying price pressures.
Additionally, while energy prices previously contributed significantly to inflation, they have retreated from their peaks. Conversely, high mortgage rates resulting from previous borrowing cost increases have slowed the growth of house prices in numerous countries.
The changing landscape of inflation and interest rates could have far-reaching implications for economic stability and growth as countries navigate the remnants of the inflationary environment fueled by the pandemic and geopolitical tensions.
Why this story matters: Understanding current inflation trends and central bank responses is crucial for economic planning and policy-making.
Key takeaway: Central banks are beginning to lower borrowing costs as global inflation eases, but achieving target inflation remains a significant challenge.
Opposing viewpoint: Some economists argue that reducing interest rates too quickly could reignite inflation, countering current efforts to stabilize prices.
